Bidenomics: Student Loan Relief

President Biden (and the last Congress) have proved that investing federal resources in the working class and the poor through millions of jobs, upgrading infrastructure in every state, direct assistance to those who need it, and student debt relief provide the broadest and most enduring success by empowering millions of people. This in turn has revived the consumer spending that drives our economy.

Student debt relief is a key component of the Bidenomics agenda. Since January of 2021, President Biden has directed his administration to continue finding ways to relieve this burden, despite the interference of the out-of-control Supreme Court. In the past three years, the Biden Administration has forgiven $137 billion in loans for more than 3.7 million student borrowers.

And they aren’t done. President Biden started this year by saying “I won’t back down from using every tool at our disposal to get student loan borrowers the relief they need to reach their dreams.”

On January 19, 2024, the administration announced student-loan debt cancellation for another 74,000 people. Half are borrowers enrolled in the administration’s updated SAVE repayment plan, while the other half received relief through the Public Service Loan Forgiveness (PSLF) program.

Secretary of Education Miguel Cardona said, “The Biden-Harris Administration has worked relentlessly to fix our country’s broken student loan system and address the needless hurdles and administrative inaccuracies that, in the past, kept borrowers from getting the student debt forgiveness they deserved.”

About $1.7 billion of the January 2024 debt forgiveness went to borrowers who have been paying on their student loans for twenty years on an Income Driven Repayment (IDR) plan but still haven’t received their forgiveness. The administration has forgiven $45.7 billion in loans for 930,500 borrowers through these Income Driven Repayment (IDR) plans.

Public Service Loan Forgiveness is available to people in government jobs and certain nonprofit workers. PSLF alone has brought relief to 793,400 borrowers, discharging $56.7 billion worth of their debts.

For more information on applying for Student Loan forgiveness, see our blog post from last year.

The January 2024 announcement comes on top of all the Biden Administration has been able to achieve for students and student loan borrowers in the past few years:

January 20, 2021: Executive Order extending the pause on student loan repayments.
August 24, 2022: Established SAVE, the most generous Income Driven Repayment (IDR) payment in history. A three-part plan to cancel $10,000 of student debt for low- to middle-income borrowers.

However, on June 30, 2023, by a vote of 6-3, the Supreme Court ruled that the Biden administration overstepped its authority when it announced that it would cancel up to $400 billion in student loans. Chief Justice John Roberts wrote for the court in Biden v. Nebraska, characterizing the SCOTUS decision as a straightforward interpretation of federal law. Justice Elena Kagan dissented, in an opinion joined by Justices Sonia Sotomayor and Ketanji Brown Jackson.

July 14, 2023: The administration took another historic step by forgiving $39 billion in student loan debt for 804,000 borrowers who had been paying down their debts for twenty years or more under the Income Driven Relief plans.